VE NEWS: Fleet manager gives VE a cool reception

Leaseplan director says Commodore is "wrong car for the times".

VE NEWS: Fleet manager gives VE a cool reception

18 July 2006Andrew Heasley

The new-generation, bigger VE Commodore may be the wrong car for the times, according to one of the country's leading fleet managers.

LeasePlan Australia, which buys about 24,000 cars a year for the Federal Government and blue-chip businesses, including Telstra and BHP Billiton, doubts the VE will enjoy the same level of success as its VT-based predecessors.

"You're talking about a market now that's gravitated towards SUVs and performance-type imports . . . you've got a market that's gravitating towards novated leases that weren't as prevalent five years ago when they were dreaming up the VE," he says. "You also have a market that has unleaded fuel at around the $1.50 mark and forecast to go higher."

"Overall it's a slightly bigger and heavier car, so it's going to drink a little bit more petrol.

"We don't think it's going to be a rip-snorting success. They're trying to spruik it up, as you would," Mr Rossi says.

The market for big sedans has contracted. Industry figures from VFACTS show that for the first half of the year, large sedan sales are down 22 per cent on last year; Commodore sales have tailed off further, down 26 per cent, or almost 10,000 fewer cars sold.

Toyota is better placed with its mix of the four-cylinder Camry and six-cylinder Aurion, he says.

"Toyota will have an edge here, with their ability to change their production cycle based on how the market moves. They've got the ability to make Camry and Aurion on the same (assembly) line.

"That's going to be an advantage for them, because they've got the four-cylinder and six-cylinder engines coming down the same production line. Unfortunately, Holden won't have that flexibility." Holden's V8 range would have even less fleet appeal than the V6, he says.

Big V8s were "very much a niche product", Mr Rossi says: "We don't think that V8s are going to be a big winner for Holden because the cost of fuel is only going to go up from here."

He says fleet managers are focused on whole-of-life motor vehicle costs, which include the purchase price, finance costs, running costs and residual value.

"Typically the two biggest costs in running a motor car are depreciation and fuel. Let's face it, the two segments that have been hit hardest most in the six-cylinder segment are these.

"This is going to be a tough ask for Holden," he says.

Holden managing director Denny Mooney says he expects the VE's fuel consumption to be close to the previous model. Holden will seek to keep production in line with demand to help preserve residual values, he said.